Investment in Health promotes while investment in Defense inhibits economic growth

Using cross-national fixed effects models covering 25 EU countries from 1995 to 2010, we quantified fiscal multipliers both before and during the recession that began in 2008.

We found that the multiplier for total government spending was 1.61 (95% CI: 1.37 to 1.86), but there was marked heterogeneity across types of spending. The fiscal multipliers ranged from −9.8 for defence (95% CI: -16.7 to −3.0) to 4.3 for health (95% CI: 2.5 to 6.1). These differences appear to be explained by varying degrees of absorption of government spending into the domestic economy. Defence was linked to significantly greater trade deficits (β = −7.58, p=0.017), whereas health and education had no effect on trade deficits (peducation=0.62; phealth= 0.33).

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Pentagon buries evidence of $125 billion administrative waste

The Pentagon has buried an internal study that exposed $125 billion in administrative waste in its business operations amid fears Congress would use the findings as an excuse to slash the defense budget, according to interviews and confidential memos obtained by The Washington Post. …

The report, issued in January 2015, identified “a clear path” for the Defense Department to save $125 billion over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology. Continue reading

Trump’s exercise in fantasy budgeting

At one point, there were something like 1,000 installations in Iraq and Afghanistan alone, from bases large enough to be small American towns to tiny combat outposts.  In 2015, there were at least 800 significant U.S. bases in foreign countries (and more small camps and places where U.S. military equipment was pre-positioned for future use).  No great power, not even Britain at its imperial height, had ever had such a global military “footprint,” such an “empire of bases,” and yet in this country it was as if no one noticed, as if it were of no importance at all.


Let’s start with a baseline look at the Pentagon’s finances at this moment.  At $600 billion-plus per year, the government is already spending more money on the Pentagon than it did at the peak of the massive military buildup President Ronald Reagan initiated in the 1980s.  In fact, despite what you might imagine, the Obama administration has pumped more tax dollars into the military in its two terms than did George W. Bush. According to the London-based International Institute for Strategic Studies, the U.S. currently spends four times what China does and 10 times what the Russians sink into their military. Continue reading

SIPRI: extended military expenditure data

SIPRI is proud to announce the online release of its extended military expenditure data. Previously, the SIPRI Military Expenditure Database covered the period 1988–2015; the extended military expenditure data goes back in most cases at least to the 1960s, and in some cases to 1949.

The new data highlights long-term trends in military spending. In the case of the USA, clear peaks in spending can be seen during the Korean War, the ‘Reagan build-up’ and the more recent wars in Afghanistan and Iraq. In Western Europe, military spending rose steadily during the cold war, while in Africa, military spending has surged in recent decades as the continent’s economies have improved.
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“In the long run, the Pentagon budget won’t go down.”

Take the current budget. It’s down slightly from its peak in 2011, when it reached the highest level since World War II, but this year’s budget for the Pentagon and related agencies is nothing to sneeze at. It comes in at roughly $600 billionmore than the peak year of the massive arms buildup initiated by President Ronald Reagan back in the 1980s. To put this figure in perspective: Despite troop levels in Iraq and Afghanistan dropping sharply over the past eight years, the Obama administration has still managed to spend more on the Pentagon than the Bush administration did during its two terms in office. Continue reading

Cripin Blunt on Trident

Cripin Blunt, the Conservative chair of the Commons foreign affairs committee, spoke after Angus Robertson in the debate and he said he would not be voting for Trident renewal.

Earlier, in an intervention, he said that his current estimate was that Trident renewal would have a lifetime cost of £179bn.

  • Blunt said Trident renewal would be “the most egregious act of self-harm to our conventional defence”.

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